Banking, Money and Taxes in China
Some expats still prefer to be paid into offshore accounts, especially those who anticipate their time in China to be short-lived; though if this is your preferred method, be prepared to deal with hefty transaction fees when making withdrawals.
The Renminbi (RMB) is the official currency in China, though it's often referred to as the Yuán (CNY) or Kuài, which is an informal word for money. Denominations come in: 1 jiǎo (coin), 5 jiǎo (coin), 1 yuán (coin and note), 5 yuán (note), 10 yuán (note), 20 yuán (note), 50 yuán (note) and 100 yuán (note); where 10 jiǎo is equal to 1 yuán. In spoken Chinese, the Jiǎo is sometimes called the Mao.
Banking in China
Opening a bank account in China is a relatively hassle-free process. Familiar international brands feature, as do a number of local institutions. There are pros and cons to both options, and the best choice always depends on individual circumstance.
Many expats prefer to utilise the services of international banks, like HSBC or Citibank, especially if they already have an existing account with one of these service providers. Do keep in mind that many of the international banks require a sizeable minimum balances or maintenance deposist and may have a limited number of ATMs available in the city.
On the other hand ATMs and branches for local banks like Bank of China, ICBC, Construction Bank of China and the Agricultural Bank of China seem to be ubiquitous; most have easily-accessible ATMs and require very little to establish an account.
Generally, expats will only need their passport and a small amount of currency to open a basic account; some branches may require a copy of your residency visa or a proof of residence (a utility bill will suffice).
Like many bureaucratic processes in China, the language barrier can present a problem from time to time. Information provided by banks is often written in Chinese, and it is a good idea to either ask for an English translation or to bring along a Chinese reader. Otherwise, identify a branch in close proximity to your home or work where employees speak English, and use this outlet for more complicated queries.
Certain banks are well known among expats for their user-friendly and reliable English Internet banking systems; foreigners recommend ICBC and CBC most often.
While Chinese banks will provide new account holders with a debit card which works at the many ATMs in any major city, paying for goods at stores is usually done in cash. The daily ATM withdrawal limits are lower than in Europe or the US, thus if you anticipate spending a large amount of cash, you may need to withdraw money over the course of a few days.
International credit cards are widely accepted in China.
Taxes in China
Expats living in China for between one and five years must pay taxes on income derived from China and on income brought into the country. After five years expats must pay tax in China on their worldwide income, though deductions are applicable if tax is also paid to the home country.
For expats who live in both China and a separate country the total number of days spent inside China is used to determine tax status.
Incomes over RMB 4,800 are taxed at a progressive rate which can reach 45 percent of income for top tax brackets. Tax laws change often, and it is important to keep up to date, as the country has been increasingly concerned with tracking expat taxes.
As in any country, the tax laws can become complex and may be better dealt with through a tax planner or consultant. Companies should help newly hired employees initially register for the tax system.